Refer to the graph above which shows the import demand and export supply curves for two nations that produce a certain product. In this two-nation model, the equilibrium world price and quantity will be:

Question

Quizplus · Accepted Answer

The equilibrium price and quantity occur at the intersection of the import demand and export supply curves. In this case, the intersection occurs at point C, which corresponds to a price of $12 per unit and a quantity of Q₂. Therefore, the correct answer is C.

Refer to the Graph Above Which Shows the Import Demand